Hibernia Energy III, LLC v. Ferae Naturae, LLC ( 2022 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
HIBERNIA ENERGY III, LLC, § No. 08-21-00092-CV
Appellant, § Appeal from the
v. § 112th Judicial District Court
FERAE NATURAE, LLC, § of Reagan County, Texas
Appellee. § (TC# CV02322)
OPINION
The genesis of this case is a 1997 judgment obtained by original judgment creditors against
two individuals (the original judgment debtors). The original judgment creditors filed an abstract
of the judgment in various Texas counties, including Reagan County, where the original judgment
debtors had an interest in a mineral lease, thereby creating a judgment lien on that lease. Through
a series of transactions, Appellant Hibernia Energy III, LLC (Hibernia) and its co-defendant at
trial, TRP Midland, LLC (TRP) had acquired the original judgment debtors’ interests in that lease.
In turn, Appellee Ferae Naturae, LLC (Ferae) was assigned the judgment lien that encumbered the
lease. Ferae then filed suit against Hibernia and TRP to foreclose on the lien. The trial court granted
Ferae’s motion for summary judgment, entered a final judgment foreclosing the lien, and issued
an order of sale, directing the sale of both Hibernia and TRP’s interests in the lease. Both Hibernia
and TRP appealed, but TRP has since resolved its dispute with Ferae and is no longer a party to
the appeal.
In its appeal, Hibernia contends that the trial court erred in granting summary judgment. In
addition, Hibernia contends that the trial court’s order of sale incorrectly described the mineral
interests subject to the lien, and mistakenly included a working interest in the lease that was not
subject to the lien. Although we disagree with the bulk of Hibernia’s arguments, and affirm the
trial court’s final judgment foreclosing the judgment lien, we remand this matter to the trial court
to modify the order of sale: (1) to address how the order must be modified given TRP’s settlement
with Ferae; (2) to ensure that the relief set forth in the order corresponds with the relief that Ferae
requested in its pleadings; and (3) to ensure that the individual judgment debtors are given the
proper credits for the proceeds from the sale of the lease that corresponds with their respective
interests. 1
I. FACTUAL BACKGROUND
A. The Underlying Reformed Judgment
Following a jury trial in 1997, a group of plaintiffs, including Patricia Love Stephens
(Patricia) and other affiliated individuals (collectively, the Stephens Entities), obtained a money
judgment against two brothers, Frank W. Cass (Frank), and Michael L. Cass (Michael) for breach
of contract, conversion, and fraud. The trial court’s 1997 final judgment awarded substantial actual
and punitive damages against both Frank and Michael.
On appeal, we at first upheld the jury’s verdict and its award of damages, rejecting all the
Casses’ claims of error; the Texas Supreme Court denied a petition for review. Cass v. Stephens,
1
Hibernia and Ferae are both unhappy with the supersedeas bond that the trial court set and have filed competing
motions before this Court on that issue. We dispose of those motions in a separate order that is issued alongside this
opinion.
2
No. 08-97-00582-CV, 2001 WL 28092, at *35 (Tex.App.--El Paso Jan. 11, 2001, pet. denied),
cert. granted, judgment vacated, 538 U.S. 1054 (2003). As the writ history reflects, the United
States Supreme Court granted certiorari on the limited question of whether the punitive damages
awards were excessive, and the Court directed us to reconsider that question considering State
Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003) (a case holding courts may
review punitive damage award for excessiveness under the Due Process Clause). On remand, and
after considering the factors set forth in Campbell, we reformed the punitive damages awards,
finding that $300,000 was a reasonable punitive damages award against Frank individually, and
that $300,000 was also a reasonable punitive damages award against Frank and Michael, jointly
and severally. See Cass v. Stephens, 156 S.W.3d 38, 77 (Tex.App.--El Paso 2004, pet. denied). We
affirmed the trial court’s judgment in all other respects. Id. at 79. After both the Texas Supreme
Court and the United States Supreme Court denied review of our decision, this Court issued its
mandate.
B. The 1999 Execution on the Judgment
In the interim, while the matter was pending on appeal, a Dallas County district court judge
issued a turnover order directing the sheriff to execute on all oil and gas and mineral interests held
by Frank in Dallas County to allow the Stephens Entities to begin collecting on their judgment The
sheriff executed on properties held by Frank in August 1999, and Frank was given a $25,000 credit
on the judgment.
C. The 2008 Creation of the Judgment Liens
In July 2008 (after we issued our mandate affirming the trial court’s final judgment as
reformed) the Stephens Entities filed an abstract of judgment in several counties in Texas where
the Casses owned property. See TEX.PROP.CODE ANN. § 52.001 (providing that the filing of an
abstract of judgment “constitutes a lien on and attaches to any real property of the defendant, other
3
than real property exempt from seizure or forced sale under Chapter 41”). The abstract stated that
together with court costs and prejudgment interest, as of July 1, 2008, Frank owed $13,178,325.88,
and Michael owed $1,911,741.24 on the judgment. In addition, it reflected that Frank was entitled
to a $25,000 credit based on the amount collected with the prior turnover order.
D. The Later Assignments of the Judgment and Judgment Liens
In September 2016, the Stephens Entities assigned all their rights and interests in the
underlying judgment and judgment liens to Patco Energy, Ltd. (Patco), of which Patricia Stephens
was the general partner. Patco thereafter made two assignments significant to this appeal. First, in
2016 Patco assigned its interests in certain oil and gas leases in Upton County to Crown Rock, L.P.
(Crown Rock) and Parsley DE Lonestar, LLC (Parsley). This transaction reflected that Patco had
judgment liens in Upton County—based on the underlying judgment against the Casses—and
Patco agreed to make a partial assignment to Crown Rock of any interest it had in the judgment
liens. In exchange, Crown Rock and Parsley agreed to pay Patco $20,200,000. Thereafter, in June
2017, Crown Rock and Parsley assigned a portion of their interest in the judgment liens to Pioneer
Natural Resources USA, Inc. (Pioneer) for an undisclosed sum of money.
Second, in August 2019, Patco made a partial assignment of its interest in the underlying
judgment to Appellee Ferae Natura, LLC (Ferae). That assignment was limited to any interests in
oil, gas and other minerals owned by the Casses, or their heirs or assignees, in Reagan County.
This assignment was duly filed in the Reagan County public records.
To keep the 2008 original abstract of judgment alive as required by the Property Code,
Patco filed a First Subsequent Abstract of Judgment in July 2018. 2 This abstract reflected the same
2
Section 52.006 of the Texas Property Code provides that “a judgment lien continues for 10 years following the date
of recording and indexing the abstract, except that if the judgment becomes dormant during that period the lien ceases
to exist.” TEX.PROP.CODE ANN. § 52.006 (a).
4
$25,000 credit to Frank, and stated that, as of June 1, 2018, with post judgment interest, Frank
owed $34,896,266.54 and Michael owed $4,946,733.43 on the judgment.
E. The Casses’ Assignment of Their Interests in the Branch Lease
When the original abstract of judgment was first filed in Reagan County in 2008, the Casses
owned a working interest in a mineral lease in that county, known as the Branch Lease—the subject
of this appeal. In September 2018, by separate assignments, Michael and Frank transferred their
interests in the Branch Lease, “below the base of the Dean Formation,” to TRP Midland, LLC
(TRP). Then in April 2019, TRP made a partial assignment to Hibernia of its interest in the Branch
Lease, limited to a specified 80 acres of the lease.
II. PROCEDURAL BACKGROUND
A. Ferae Files its Foreclosure Lawsuit
In January 2020, Ferae filed its original petition seeking to foreclose its judgment lien on
the Branch Lease, naming among others, Hibernia and TRP (collectively, the Defendants). The
suit requested an order of sale corresponding to the interest in the lease that previously belonged
to the Casses. In its petition, Ferae alleged that the Defendants had purchased their respective
interests in the lease with notice of the existing judgment lien, based on the abstract of judgment
on file in Reagan County.
B. Attempt to Add Claimed Necessary Parties
After answering Ferae’s lawsuit, the Defendants sought to bring the other “judgment
creditors” into the case, including Patco, Crown Rock, Parsley, and Pioneer, all of whom the
Defendants asserted were “necessary” parties to the lawsuit. Defendants theorized that any credit
the Casses might receive from the sale of the Branch Lease would effectively cut into the other
judgment creditors’ ability to collect on their interest in the judgment. To that end, the Defendants
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filed a third-party petition naming the Stephens Entities and Patco, seeking among other things, an
accounting of any payments they received on the underlying judgment, and a declaration that the
underlying judgment was satisfied.
C. Ferae Moves for Summary Judgment
In May 2020, Ferae moved for summary judgment, seeking a judicial foreclosure on its
lien and an order of sale of the interest in the Branch Lease that the Defendants had received from
the Casses. In its motion, Ferae contended that the undisputed evidence established that it acquired
the right to foreclose on the lien from Patco and that: (1) the Casses owned an 82% working interest
in the Branch Lease when the original and later abstracts of judgment were filed in Reagan County;
(2) the filing of the abstracts of judgment created a judicial lien on all property then-owned by the
Casses in Reagan County; and (3) the Casses transferred their interests in the Branch Lease to the
Defendants subject to that lien. Ferae attached several documents in support of its right to foreclose
on the lien, including: (1) the reformed final judgment against the Casses and this Court’s mandate
affirming the judgment as reformed; (2) the abstracts of judgment filed in Reagan County; (3) the
assignment of the reformed judgment from the Stephens Entities to Patco; (4) Patco’s partial
assignment of the reformed judgment to Ferae; and (5) the assignments made by the Casses to TRP
of their interests in the Branch Lease, and the partial assignment that TRP made to Hibernia of its
interests in the lease.
Relevant to this appeal, the Defendants opposed the motion arguing, among other things,
that Ferae’s predecessors-in-interest had received at least two payments from third parties—in
addition to the $25,000 credit from the 1999 writ of execution—which the Defendants argued
should have been applied as credits to the underlying judgment. They argued that the question of
whether these credits should have been applied to the judgment raised a fact question about
whether the judgment has been either fully or partially satisfied, which in turn, potentially
6
extinguished the judgment lien on the Branch Lease. The two payments consisted of the
$20,200,000 payment that Patco received from Crown Rock and Parsley in 2016, and a $300,000
payment that the Stephens Entities received from PCORE Exploration and Production, LLC
(PCORE), in exchange for a “partial release of judgment lien” in PCORE’S favor for its interest
in an oil and gas lease in which Frank Cass also had an interest.
In reply, Ferae responded that the Defendants had presented no evidence to suggest that
these two payments were made on the Casses’ behalf or that the parties intended for them to be
applied as credits to the underlying judgment. And Ferae further argued that even if the payments
could be credited to the judgment, those amounts would not have been enough to extinguish the
judgment. Accordingly, Ferae argued that the Defendants had failed to meet their burden of raising
a question of fact on Ferae’s entitlement to foreclose on the lien.
Before the summary judgment motion was heard, the Defendants counterclaimed against
Ferae. The counterclaim sought an “accounting” of all monies that they or their predecessors-in-
interest had received relating to any property that the Casses owned or previously owned, including
any monies received from their assignments of the judgment or judgment liens to any third parties.
The Defendants also sought a declaratory judgment that the underlying judgment against the
Casses had been fully satisfied, and that the assignment to Ferae was therefore void and of no
effect.
Ferae then filed a First Supplemental Motion for Summary Judgment, seeking dismissal of
the Defendants’ counterclaim as lacking merit.
D. Patco Submits Patricia Stephens’ Declaration
As part of a discovery dispute between Patco and TRP, Patco attached a declaration from
its president, Patricia Stephens, revealing that her now-deceased landman had given her 16 boxes
of documents that he had maintained. The documents related to various properties in which she
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and Patco held an interest. While she had not reviewed the documents, she stated her belief that
the boxes might contain documents relating to “properties formerly belonging to Frank Cass that
are now owned by myself and/or Patco, and that are potentially responsive” to TRP’s discovery
requests. 3 The trial court set the discovery dispute (a motion to compel against Patco) for the same
time as the hearing on Ferae’s supplemental motion for summary judgment.
E. The Trial Court Enters its Ruling and Judgment
Following its hearing, the trial court issued an order in which it found that Ferae had a valid
judgment lien on the Branch Lease, and that Ferae had a right to foreclose on the lien. It also
dismissed the counterclaims that Hibernia and TRP had filed against Ferae. And after finding that
its order disposed of all pending claims between Ferae, Hibernia, and TRP, it granted Ferae’s
motion to sever its lawsuit from the claims against the other defendants, making the matter ripe
for the entry of a final judgment.
Several months after the hearing, the trial court entered its final judgment and order of sale,
in which it recognized that Ferae’s judgment lien was based on the 1997 reformed judgment
against the Casses, and calculated that with prejudgment interest, as of the date of the summary
judgment hearing, Frank Cass owed $44,403,075.48, and Michael Cass owed $6,292,459.15, for
a total of $50,695,534.63. The trial court considered the $25,000 credit that Frank was entitled
based on the 1999 execution on his property in calculating the amounts owed. But the court did
not address whether the Casses were entitled to a credit for the $20,200,000 payment that Patco
had received from Crown Rock and Parsley, or for the $300,000 payment that the Stephens Entities
had received from PCORE.
3
TRP had served discovery on Patco requesting, among other things, that it identify and produce documents relating
to the value of the judgment lien on the Branch Lease, the amounts Patco had received for any assignments of the lien,
all documents it relied on in calculating its interest in the lien, documents pertaining to any other assignments it made
of its interest in the underlying judgment, information relative to the 1999 execution on Frank Cass’s property, and
any correspondence Patco had with various entities over the lien, the Branch Lease, and the current lawsuit in general.
8
The court then found that Ferae could foreclose on the property in accordance with the
interests set forth in its order of sale. In turn, the order of sale described those interests as follows:
The “Hibernia Interest”: An 82% interest in the Branch Lease, subject to its
proportionate share of lease royalties, overriding royalties and other burdens
totaling 25% (thereby delivering a 61.5% net revenue interest to said 82% interest).
For the East 80 acres of the West half of the San Antonio Ditch Company Survey
No. 1 (A-410) for the depths below the base of the Dean Formation.
The “TRP Midland Interest”: An 82% interest in the Branch Lease, subject to its
proportionate share of lease royalties, overriding royalties, and other burdens
totaling 25% (thereby delivering a 61.5% net revenue interest to said 82% interest)
for the entirety of the Branch Lease for depths below the base of the Dean
Formation. LESS AND EXCEPT the East 80 acres of the West half of the San
Antonio Ditch Company Survey No. 1 (A-410)[.] 4
Hibernia filed a motion for new trial in which it argued, among other things, that the order
of sale did not accurately describe its interests in the Branch Lease and provided Ferae with more
relief than it was entitled to. The trial court denied the motion, together with all other post judgment
motions on file.
Both Hibernia and TRP appealed from the trial court’s final judgment and order of sale,
but Ferae and TRP settled their dispute while the matter was pending on appeal, and TRP is no
longer a party to the appeal.
III. ISSUES ON APPEAL
The overarching theme of Hibernia’s first two issues on appeal focus on whether the
judgment lien on the Branch Lease was still valid, or whether it had been extinguished due to
payments that the Stephens Entities and Patco had previously received. In its first issue, Hibernia
contends that to resolve this question, it was necessary to join into the suit all of the past and
present judgment creditors, along with the original judgment debtors, to account for any payments
4
A third brother, William Cass, who was not a debtor in the underlying judgment, held the overriding royalty interest,
which the parties agree was not subject to the lien.
9
that may have been made since the original judgment was entered in 1997. Thus, Hibernia claims
the trial court erred in failing to join them in the lawsuit. In its second issue, Hibernia contends
that: (1) some of Ferae’s evidence on the validity of its lien was inadmissible and did not support
a finding that the lien was valid; (2) the trial court lacked the authority to calculate the amount of
post judgment interest owed on the judgment without expert testimony; (3) the record shows that
the judgment was either fully or partially satisfied by the $20,500,000 in payments that Ferae’s
predecessors-in-interest previously received; and (4) the trial court should have deferred ruling on
the summary judgment motion given Patricia Stephens’ declaration that she had additional
evidence on the issue of whether the underlying judgment was satisfied. And in its third issue,
Hibernia contends that the trial court’s order of sale did not correctly reflect the true nature of its
interest in the Branch Lease. As explained below, we find no merit in any of Hibernia’s first two
issues, but do find some errors in the order of sale that we direct the trial court to address on remand
in the interest of justice.
IV. THE TRIAL COURT DID NOT ERR IN FAILING TO JOIN OTHER ENTITIES
TO THE LAWSUIT
In Issue One, Hibernia contends that the trial court erred by not joining as necessary parties
either the original judgment debtors (the Casses) or the other judgment creditors, both past and
present, in the lawsuit. We consider each category of potential parties separately and conclude that
neither the original judgment debtors nor the other judgment creditors were necessary parties to
Ferae’s foreclosure suit.
A. Standard of Review and Applicable Law
We review a trial court’s rulings on issues on joinder of parties for an abuse of discretion.
See Crawford v. XTO Energy, Inc., 509 S.W.3d 906, 910–11 (Tex. 2017). “A trial court abuses its
discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules
10
or principles.” Id., at 911, quoting Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002)
(per curiam).
In general, issues of joinder are governed by Rule 39 of the Texas Rules of Civil Procedure,
which provides that:
“A person who is subject to service of process shall be joined as a party in the action
if (1) in his absence complete relief cannot be accorded among those already
parties, or (2) he claims an interest relating to the subject of the action and is so
situated that the disposition of the action in his absence may (i) as a practical matter
impair or impede his ability to protect that interest or (ii) leave any of the persons
already parties subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations by reason of his claimed interest.”
TEX.R.CIV.P. 39(a). The rule further provides that if such a party has not yet been joined, “the
court shall order that he be made a party.” Id. Although the rule contemplates that certain persons
“shall” be joined, there is no “precise formula for determining whether a particular person falls
within its provisions.” Cooper v. Texas Gulf Indus., Inc., 513 S.W.2d 200, 204 (Tex. 1974). The
Texas Supreme Court has further recognized that “it would be rare indeed if there were a person
whose presence was so indispensable in the sense that his absence deprives the court of jurisdiction
to adjudicate between the parties already joined.” Id. In other words, a failure to join an
indispensable party will rarely render a judgment void. Browning v. Placke, 698 S.W.2d 362, 363
(Tex. 1985) (per curiam).
B. Failure to Join the Casses as Judgment Debtors
On appeal, Hibernia contends that the trial court erred by failing to join the original
judgment debtors (the Casses) in the current lawsuit. But Hibernia did not raise this issue in the
trial court, and instead, only sought to join the judgment creditors in the suit. In general, when a
party fails to raise a joinder issue in the trial court, the issue is waived for appellate review. See
Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex. 1982) (per curiam) (defendants could not be heard
to complain for the first time on appeal that an entity was an indispensable party); see also Brooks
11
v. Northglen Ass’n, 141 S.W.3d 158, 163 (Tex. 2004) (respondent had the opportunity to bring up
joinder, but waived it by not raising it in the trial court), citing TEX.R.APP.P. 33.1 (as a prerequisite
to presenting a complaint for appellate review, the record must show that “the complaint was made
to the trial court by a timely request, objection, or motion . . .”). There are limited instances,
however, in which the nonjoinder of a person or entity constitutes “fundamental” error that may
be raised for the first time on appeal. See Dueitt v. Dueitt, 802 S.W.2d 859, 861 (Tex.App.--
Houston [1st Dist.] 1991, no writ) (“The failure to join a jurisdictionally indispensable party
constitutes fundamental error, which an appellate court is bound to notice if the error is apparent
from the face of the record.”); see also Tristan v. Castillo, No. 04-05-00658-CV, 2007 WL 752203,
at *3 (Tex.App.--San Antonio Mar. 14, 2007, no pet.) (mem. op.) (finding that nonjoinder of
individual did not constitute fundamental error where individual’s absence did not deprive the trial
court of jurisdiction).
Hibernia does not directly address the question of whether the failure to join the Casses in
the lawsuit was fundamental error, but we conclude that it was not. The Casses’ presence in the
lawsuit did not deprive the trial court of jurisdiction to grant Ferae’s request to foreclose on its
lien. In general, an action to foreclose on a lien is an “in rem” proceeding, and only those
individuals or entities having a current interest in the property subject to foreclosure are necessary
parties to a foreclosure suit. See generally Pereira v. Gulf Elec. Co., 343 S.W.2d 334, 336
(Tex.App.--Waco 1960, writ ref’d n.r.e.) (while a former owner of property may be a proper party
in a suit to foreclose a lien, the former owner is not a necessary party in an “in rem” proceeding),
citing Hartfield v. Greber, 207 S.W. 85, 86 (Tex. [Comm’n Op.] 1918) (“It is a well-settled rule
of the common law that, in a suit to foreclose a mortgage, it is not necessary to make the debtor a
party to the suit, where he has parted with his interest in the property, unless a personal judgment
is sought against him.”); see also; Demo v. Goforth, 556 S.W.2d 128, 130 (Tex.App.--San Antonio
12
1977, no writ) (where original judgment debtors had assigned their interest in subject property to
named defendants, they were not necessary parties to lawsuit that sought to foreclose on a
judgment lien that encumbered the property). Here, the Casses had parted with their interests in
the Branch Lease when Ferae brought its foreclosure lawsuit, and therefore, the Casses had no
current interest in the property. And Hibernia has cited no authority suggesting that a person or
entity with a past interest in property that is the subject of foreclosure must be joined in a
foreclosure suit. To the contrary, in the only two cases that Hibernia cites, the only issue before
those courts was whether the trial court properly joined all parties who had a current interest in a
property dispute. 5
We thus conclude that it was not fundamental error for the trial court to rule on Ferae’s
foreclosure suit in the Casses’ absence.
C. The Order of Sale was Overbroad
Hibernia, however, does point out that the trial court’s order of sale impacted the Casses’
rights because it states that if the proceeds from the sale of Hibernia and TRP’s interests in the
Branch Lease cannot satisfy the underlying judgment, the sheriff or constable who was conducting
the sale was “commanded” to take said monies “or any balance remaining unpaid out of any other
property of the Judgment Debtors Frank Cass and Michael Cass as in ordinary execution . . .” We
agree with Hibernia that this language was improperly included in the order of sale, as Ferae never
sought such relief, and instead, its suit was limited to only foreclosing on its lien on the Branch
Lease.
5
See Pierce v. Blalack, 535 S.W.3d 35, 42 (Tex.App.--Texarkana 2017, no pet.) (trial court did not abuse its discretion
in ordering the joinder of all individuals with a potential interest in property that was the subject of a trespass-to-try
title lawsuit); Longoria v. Exxon Mobil Corp., 255 S.W.3d 174, 181 (Tex.App.--San Antonio 2008, pet. denied) (in
title dispute over real property on which a mineral estate was located, trial court did not abuse its discretion in ordering
the joinder of the owners of the mineral estate and any royalty interests, as well as all lessors).
13
That portion of the order of sale is also problematic because the Casses are not parties. See,
e.g., Brooks, 141 S.W.3d at 163-64 (recognizing that a trial court has no jurisdiction to declare the
rights of parties who are not before it). Yet, we do not view this as an error in the trial court’s
failure to join the Casses as necessary parties to the lawsuit; instead, the order simply gave Ferae
more relief than it requested in its pleadings. See TEX.R.CIV.P. 301 (“The judgment of the court
shall conform to the pleadings and the nature of the cases proved . . .”); Rouhana v. Ramirez, 556
S.W.3d 472, 477 (Tex.App.--El Paso 2018, no pet.) (“a judgment must conform to the pleadings
and proof, and a party may not be granted relief in the absence of pleadings to support it”). The
remedy for this variance is not reversal of the trial court’s judgment, but simply a remand to reform
the order of sale. Thus, in the interest of justice, we find it appropriate to remand this matter to the
trial court with directions to reform the order of sale to omit this language, and to limit its order
solely to the sale of Hibernia’s interest in the Branch Lease. See generally TEX.R.APP.P. 43.6 (a
“court of appeals may make any other appropriate order that the law and the nature of the case
require”).
D. The Failure to Join the Other Judgment Creditors
Hibernia also claims error in the trial court’s failure to join the other “judgment creditors”
to the lawsuit, including Patco, Crown Rock, Parsley, and Pioneer. Each of these entities had a
continuing interest in collecting on the underlying judgment and the various judgment liens that
they had been assigned. Hibernia contends that because any proceeds from the sale of Ferae’s
judgment lien will be credited to the underlying judgment, this would reduce the amount available
to the other judgment creditors in their future collection efforts.
Hibernia primarily relies on the Texas Supreme Court’s opinion in McDonough v. Cross,
40 Tex. 251, 287 (Tex. 1874) for the proposition that “all judgment creditors should be joined in
a foreclosure suit.” McDonough, however, is inapt. It involved a situation in which two creditors
14
of an estate had an equal interest in executing on the same property. One creditor had obtained a
lien on the property and sought to foreclose on the lien to the exclusion of the other creditor. Id. at
286-87. The court in McDonough held that both creditors were necessary parties to the foreclosure
suit given their identical interest in the same property. Id. Here, in contrast, the other judgment
creditors identified by Hibernia had either previously transferred all their interests on the judgment
lien on which Ferae sought foreclosure, or never had any such interest to begin with. And the fact
that some of the other judgment creditors had a past interest in the lien does not render them
necessary parties to the lawsuit. To the contrary, the Texas Property Code expressly provides that
a holder of a prior encumbrance on land or a leasehold is not a necessary party to a suit to foreclose
a lien. TEX.PROP.CODE ANN. § 56.041(b). Similarly, the Texas Supreme Court has expressly held
that when a party has assigned all its rights to a lien on a property, it is not a necessary party to a
foreclosure lawsuit. See Douglass v. Blount, 67 S.W. 484, 489 (Tex. 1902). Contrary to Hibernia’s
claim, the presence of the other judgment creditors was unnecessary to Ferae’s foreclosure suit.
We also reject Hibernia’s contention that the failure to join the other judgment creditors
would allow Ferae to usurp the other judgment creditor’s interests in the underlying judgment. In
support of this argument, Hibernia relies on Turner v. Phelps & Co., 46 Tex. 251, 261 (1876) in
which the court recognized that when there are multiple creditors seeking to collect on a single
“security or trust fund,” one creditor may not “merely by [filing] a suit in his own behalf, seize
upon and appropriate to his own benefit the entire security or trust fund.” In that case, however,
the court dealt with multiple creditors who had an interest in the same property. The court
recognized that it would be unfair to allow one creditor with a secured interest in the property to
“appropriate to his own benefit” the proceeds from the sale of that property without considering
the other creditor’s rights. Id. But here, while the other judgment creditors had a mutual interest in
collecting on the underlying judgment, none of them had any interest in Ferae’s judgment lien.
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Hibernia also presented no evidence to suggest that the sale of Ferae’s interest in the Branch
Lease would have impacted the rights of the other judgment creditors to collect on their share of
the underlying judgment. The Casses owed over $50 million dollars on the underlying judgment,
and Hibernia failed to demonstrate how a credit from the sale of its interest in the Branch Lease
would have impacted the other judgment creditors’ ability to collect on their proportionate share
of the judgment. We thus conclude that the trial court did not err in failing to join the other
judgment creditors in Ferae’s foreclosure suit.
Hibernia’s Issue One is overruled, subject to our directions to the trial court to modify its
Order of Sale to conform to Ferae’s pleadings on remand.
V. THE TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT
In Issue Two, Hibernia broadly contends that: (1) Ferae failed to meet its initial burden of
establishing that it had a valid, subsisting judgment lien on the Branch Lease; and (2) the record
raises a fact question on whether the underlying judgment against the Casses had been either fully
or partially extinguished. Each of these contentions contains multiple subparts addressing the
admissibility of Ferae’s summary judgment evidence.
A. Standard of Review
“A party seeking to recover upon a claim . . . may, at any time after the adverse party has
appeared or answered, move with or without supporting affidavits for a summary judgment in his
favor upon all or any part thereof.” TEX.R.CIV.P. 166a(a). “In a traditional motion for summary
judgment, the moving party must show that no genuine dispute exists as to any material fact such
that the party is entitled to judgment as a matter of law.” Eagle Oil & Gas Co. v. TRO-X, L.P., 619
S.W.3d 699, 705 (Tex. 2021), citing TEX.R.CIV.P. 166a(c). We review a trial court’s grant of
summary judgment de novo. Id. at 705. In doing so, we review the evidence in the light most
favorable to the non-movant, indulge every reasonable inference in favor of the non-movant, and
16
resolve any doubts against the motion. Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520
S.W.3d 39, 45 (Tex. 2017), citing City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).
When a party with the burden of proof moves for traditional summary judgment, that party
“bears the burden to conclusively establish that it is entitled to judgment as a matter of law,
notwithstanding the nonmovant’s response or lack thereof.” B.C. v. Steak N Shake Operations,
Inc., 598 S.W.3d 256, 258-59 (Tex. 2020) (per curiam), citing TEX.R.CIV.P. 166a(c). Thus, when
a plaintiff moves for summary judgment, it must establish its right to summary judgment by
conclusively proving all elements of its cause of action as a matter of law. Havlen v. McDougall,
22 S.W.3d 343, 345 (Tex. 2000). A matter is conclusively established if reasonable people could
not differ as to the conclusion to be drawn from the evidence. See City of Keller, 168 S.W.3d at
815-16. If the movant establishes its right to judgment as a matter of law, the burden shifts to the
nonmovant to present evidence raising a genuine issue of material fact precluding summary
judgment, applying the same standard in determining whether reasonable and fair-minded jurors
could differ in their conclusions considering all the evidence presented. Goodyear Tire & Rubber
Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam); Nevarez v. USAA Fed. Sav. Bank,
630 S.W.3d 416, 421–22 (Tex.App.--El Paso 2021, pet. denied).
B. Applicable Law
A plaintiff seeking to foreclose on a judgment lien that encumbers the defendant’s property
has the initial burden of establishing that its lien is valid and subsisting. See Nichols v. Cansler,
140 S.W.2d 254, 255-56 (Tex.App.--Fort Worth 1940, writ dism’d judgm’t cor.) (in an action in
rem to foreclose on a statutory judgment lien, the plaintiffs carry the burden to show that the lien
is a valid, subsisting lien), citing Boyd v. Ghent, 64 S.W. 929, 930 (1901); see generally 48
TEX.JUR.3D JUDGMENTS § 551 (burden of proof is on the creditor to establish that a lien is valid
and subsisting). Aside from showing that it is the owner of the judgment lien, the plaintiff must
17
establish the validity of its lien by proving that an abstract of judgment was properly recorded and
indexed in the county records where the debtor’s property was located. See Murray v. Cadle Co.,
257 S.W.3d 291, 296–97 (Tex.App.--Dallas 2008, pet. denied); Siddiq v. Hawkins, No. 05-09-
00581-CV, 2011 WL 3211254, at *6 (Tex.App.--Dallas July 29, 2011, pet. denied) (mem. op.)
(“The party seeking to foreclose a judgment lien has the burden of proving the abstract of judgment
was properly recorded and indexed.”).
When properly recorded and indexed, an abstract of judgment creates a judgment lien on
the debtor’s property in the county where the abstract is recorded, which is superior to the rights
of any subsequent purchasers and lienholders. See Gordon v. W. Houston Trees, Ltd., 352 S.W.3d
32, 39 (Tex.App.--Houston [1st Dist.] 2011, no pet.); see also Hahn v. Love, 394 S.W.3d 14, 20
(Tex.App.--Houston [1st Dist.] 2012, pet. denied) (a judgment lien automatically attaches to a
debtor’s property through a properly recorded and indexed abstract of judgment). The purpose of
an abstract of judgment is to create a lien against the debtor’s property and to provide notice to
subsequent purchasers and encumbrancers of the existence of the judgment and the lien. Wilson v.
Dvorak, 228 S.W.3d 228, 233 (Tex.App.--San Antonio 2007, pet. denied).
But if the judgment debtors—or someone acting on their behalf—has paid off the
underlying judgment, the now extinguished judgment also extinguishes any related judgment liens
on the debtor’s property. See Equitable Tr. Co. v. Roland, 644 S.W.2d 46, 52 (Tex.App.--San
Antonio 1982, no writ) (where “lien was granted solely to satisfy the judgment appellant sought
in its original action on an equipment lease, the lien was extinguished once the judgment was
satisfied”). The Texas Property Code provides that the “[s]atisfaction of a judgment in whole or in
part may be shown by recordation of: (1) a return on an execution issued on the judgment, or a
copy of the return, certified by the officer making the return,” with certain specified information
contained in it, or by (2) a receipt, acknowledgment, or release signed by the party entitled to
18
receive payment of the judgment or by that person’s agent or attorney of record and that is
acknowledged or proven in the manner required for deeds. TEX.PROP.CODE ANN. § 52.005. Section
52.005 is not, however, the only way satisfaction of a judgment can be shown. See Cadle Co. v.
Int’l Bank of Com., No. 04-06-00456-CV, 2007 WL 752260, at *3 (Tex.App.--San Antonio Mar.
14, 2007, pet. denied) (mem. op.). Thus, if there is sufficient evidence to establish that a judgment
creditor accepted money in complete satisfaction and release of his judgment, that judgment will
have no further force or authority. Id., citing Rapp v. Mandell & Wright, P.C., 123 S.W.3d 431,
434-35 (Tex.App.--Houston [14th Dist.] 2003, pet. denied); Reames v. Logue, 712 S.W.2d 802,
805 (Tex.App.--Dallas 1986, writ ref’d n.r.e.).
C. Ferae Met its Burden of Establishing the Validity of its Lien
We first consider Hibernia’s argument that Ferae failed to establish that it had a valid
judgment lien on the Branch Lease. Hibernia contends that the evidence Ferae submitted in support
of this claim was inadmissible and should not have been considered by the trial court in granting
summary judgment in Ferae’s favor. Ferae’s evidence consisted of: (1) the assignment of the
underlying judgment and all attendant judgment liens from the Stephens Entities to Patco; (2) the
partial assignment from Patco to Ferae of its interests in the underlying judgment and judgment
liens pertaining to all mineral properties owned or previously owned by the Casses, including those
in Reagan County; (3) copies of the 2008 and 2018 abstracts of judgment that were filed in Reagan
County; and (4) the assignment from the Casses to Hibernia of their interest in the Branch Lease.
Ferae also provided an internet link to the Reagan County Index of property records. On appeal,
Hibernia challenges the admissibility of only two of these items: (1) the document reflecting the
assignment of the underlying judgment and judgment liens from the Stephens Entities to Patco,
and (2) the internet link to the Reagan County Index. We consider the challenges together because
they both stumble for a common reason.
19
Ferae established that the Stephens Entities transferred their interests in the underlying
judgment and judgment liens to Patco with an assignment document marked as Exhibit G. Hibernia
contends the document contains inadmissible hearsay. Hibernia also challenged Ferae’s Exhibit
K, an internet link to the Reagan County Index. Hibernia objected that this document constituted
inadmissible hearsay and was not properly authenticated.
Ferae responds that Hibernia waived the admissibility issues on appeal by failing to timely
object to the admission of the exhibit, and by failing to obtain a ruling on its objection in the trial
court. We disagree with the timeliness argument, but agree that Hibernia never obtained a ruling
on the objections. Hibernia objected to Ferae’s summary judgment exhibits on the day of the
summary judgment hearing. Rule 166a(c) of the Texas Rules of Civil Procedure requires the non-
moving party in a summary judgment proceeding to file and serve “opposing affidavits or other
written response” not later than seven days before the day of the hearing. Ferae reads this rule to
include objections to summary judgment evidence. Yet the filing of an objection to a movant’s
summary judgment evidence is “not the same as a summary judgment response.” See Aerobic
Maint. & Serv., Inc. v. First United Bank & Tr. Co., No. 02-08-232-CV, 2009 WL 1425179, at *5
(Tex.App.--Fort Worth May 21, 2009, no pet.) (mem. op.). So “objections to the form of summary
judgment proof,” which include objections based on hearsay, may be raised at “any time before
the judgment is rendered.” Id.; see also Life Ins. Co. of Va. v. Gar-Dal, Inc., 570 S.W.2d 378, 380-
81 (Tex. 1978) (recognizing that a nonmovant may object to defects in the form of summary
judgment evidence at any time before judgment is rendered). Thus, Hibernia’s objection to the
evidence was timely filed.
That said, because Hibernia’s hearsay objections went only to the form of Ferae’s summary
judgment evidence, rather than their substance, Hibernia needed to obtain a ruling on its objection
to preserve the issue for appellate review. See Seim v. Allstate Texas Lloyds, 551 S.W.3d 161, 166
20
(Tex. 2018) (recognizing that if a party fails to obtain a ruling on an objection to the form of its
opponent’s summary judgment evidence, the issue is waived for appellate review, and the evidence
remains part of the summary judgment proof); see also Dailey v. Albertson’s, Inc., 83 S.W.3d 222,
225 (Tex.App.--El Paso 2002, no pet.) (issues relating to form defects in summary judgment
evidence must be preserved by both an objection and ruling at the trial court level). Cnty. of El
Paso v. Baker, 579 S.W.3d 686, 694 (Tex.App.--El Paso 2019, no pet.) (recognizing that a hearsay
objection is one of form). The trial court’s’ ruling may be either in writing or in the form of the
“trial court’s on-the-record, unequivocal oral ruling” on the objection. See FieldTurf USA, Inc. v.
Pleasant Grove Indep. Sch. Dist., 642 S.W.3d 829, 838 (Tex. 2022). Although Hibernia’s attorney
discussed the objection to Ferae’s summary judgment evidence at the summary judgment hearing
and stated that he intended to file a proposed order ruling on it, the trial court did not make an
express oral ruling, nor did it later issue a written ruling. Hibernia therefore failed to preserve the
hearsay complaint for Exhibits G and K for our review. See Baker, 579 S.W.3d at 694 (appellant’s
hearsay arguments were waived where trial court never made a ruling on its objection).
Like hearsay, a party must also obtain a ruling on authentication objections to preserve
appellate review. See Aerobic Maint. & Serv., Inc., 2009 WL 1425179, at *5 n.7 (recognizing that
both hearsay and “authentication” objections to a movant’s summary judgment proof are
objections about the form rather than substance of the evidence); Adi v. Prudential Prop. & Cas.
Ins. Co., No. 14-01-01001-CV, 2003 WL 22908129, at *3 (Tex.App.--Houston [14th Dist.]
Dec. 11, 2003, pet. denied) (mem. op.) (recognizing that both hearsay objections and objections to
the authentication of evidence are both defects of form, and that both objections are waived by a
party’s failure to secure rulings on them), citing Rogers v. Cont’l Airlines, Inc., 41 S.W.3d 196,
200 (Tex.App.--Houston [14th Dist.] 2001, no pet.). We likewise conclude that Hibernia’s
authentication objection to K is waived.
21
As Hibernia raises no other challenges to the admissibility of Ferae’s summary judgment
evidence to support its claim that it had a valid judgment lien on the Branch Lease, we conclude
that Ferae met its initial burden of establishing the validity of the lien.
D. Hibernia Failed to Present Evidence Establishing that the Judgment Lien
was Extinguished
This brings us to the crux of Hibernia’s argument: whether it raised a genuine issue of
material of fact for whether the underlying judgment against the Casses was partially or fully
satisfied by payments that the Stephens Entities and Patco had previously received from third
parties. Hibernia’s argument on this issue can be broken into four categories that we discuss
separately below: (1) whether the trial court erred in calculating the amount the Casses still owed
on the underlying judgment without the aid of an expert witness testimony to compute the amount
of post judgment interest owed; (2) whether the trial court erred in failing to apply a credit of
$20,200,000 on the judgment based on the payment Patco received from Crown Rock and Parsley
in Upton County; (3) whether the trial court erred in failing to apply a credit of $300,000 on the
judgment based on the payment the Stephens Entities received from PCORE to extinguish a
judgment lien in Reagan County; and (4) whether the trial court erred in failing to consider Patricia
Stephens’ declaration about the documents she had in her possession in determining whether the
underlying judgment was satisfied.
22
1. Ferae’s waiver argument
To begin with, Ferae argues that Hibernia did not preserve any of these issues for our
review, as Hibernia’s pleadings did not conform to Rule 95 of the Texas Rules of Civil Procedure.
That rule provides that a defendant who raises the affirmative defense of “payment” must provide
an itemized “account” of the payments he claims were made. TEX.R.CIV.P. 95 (providing that
when a “[w]hen a defendant shall desire to prove payment, he shall file with his plea an account
stating distinctly the nature of such payment, and the several items thereof; failing to do so, he
shall not be allowed to prove the same, unless it be so plainly and particularly described in the plea
as to give the plaintiff full notice of the character thereof.”). Hibernia raised as affirmative defenses
the “doctrine of payment” and “the doctrine of release.” It also alleged in its answer that it was
entitled to an “offset” in an unspecified amount, but admittedly did not file an “account” stating
the nature of the payments or the offset to which it believed it was entitled. We do not believe,
however, that Rule 95’s requirement of providing an itemized “account” of the payments made
applies to any of Hibernia’s defenses. To the contrary, this requirement appears to only apply to
cases in which a plaintiff-creditor is attempting to collect on a debt owed by the defendant, and the
defendant is claiming that the debt was either paid in full or in part. See, e.g., Rea v. Sunbelt Sav.,
FSB, Dallas, Texas, 822 S.W.2d 370, 373 (Tex.App.--Dallas 1991, no writ) (recognizing that Rule
95 requires an affirmative plea of payment in response to plaintiff’s attempt to collect on amounts
owing on defendant’s note to plaintiff); Equitable Tr. Co., 644 S.W.2d at 53 (recognizing that Rule
95 applies to situations in which the plaintiff is suing a defendant in the capacity of a judgment
creditor). Ferae was not attempting to collect on a debt owed by Hibernia, and Hibernia was not
claiming that it made any payments to Ferae on any such debt. Instead, Hibernia’s affirmative
defenses all relate to the issue of whether third parties had made payments to Ferae’s predecessors-
in-interest that should have been credited against the underlying judgment, and whether this would
23
have extinguished Ferae’s judgment lien. And Ferae has cited no cases for the proposition that
Rule 95 applies in this circumstance.
Moreover, regardless of any pleading deficiencies, the record reflects that the parties tried
this issue by consent in the summary judgment proceedings, as the parties fully briefed the question
of whether there were any third-party payments that should have been credited to the underlying
judgment in their summary judgment pleadings. See Cooper v. Circle Ten Council Boy Scouts of
Am., 254 S.W.3d 689, 694 (Tex.App.--Dallas 2008, no pet.) (recognizing that “[un]pleaded issues
may be tried by consent in summary judgment proceedings if no one objects”), citing Roark v.
Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991); Roberts v. Wells Fargo Bank, N.A.,
406 S.W.3d 702, 707 (Tex.App.--El Paso 2013, no pet.) (where record failed to demonstrate that
appellee objected when appellant raised an unpleaded claim in summary judgment proceedings,
the claim was tried by consent); Equitable Tr. Co., 644 S.W.2d at 52–53 (where parties argued the
issue of payment at trial, and payment was conceded by defendant’s counsel, the issue was tried
by consent). Accordingly, the issue of whether the judgment was satisfied by the third-party
payments was before the trial court in the summary judgment proceedings, and we will therefore
consider the issue on appeal. See generally Li v. Pemberton Park Cmty. Ass’n, 631 S.W.3d 701,
704 (Tex. 2021) (per curiam) (appellate courts should hesitate to turn away claims based on waiver
or failure to preserve the issue, particularly when a party sufficiently “registered” an issue for the
trial court to consider).
2. Hibernia failed to establish any error in the court’s interest calculation
We first consider Hibernia’s argument that the trial court erred in calculating the amount
that the Casses still owed on the underlying judgment when it computed the amount of post
judgment interest without help from expert witness testimony. Hibernia contends that the trial
court improperly relied on two exhibits that Ferae submitted in support of its supplemental motion
24
for summary judgment (Exhibits O and O-1) in which Hibernia’s business manager, Stephen
O’Connell, provided his proposed calculation of the amount of interest that had accrued as of the
date of the summary judgment hearing. Exhibit O is O’Connell’s declaration stating that based on
the judgment’s principal balance and accrued post judgment interest, “as of December 11, 2020,
Frank Cass owes $44,403,075.48 and Michael Cass owes $6,292,459.15.” In support of his
calculation, O’Connell attached Exhibit O-1, which consisted of a chart showing how he computed
the amount of interest for each year since the judgment was first entered in 1997. O’Connell added
that in calculating the amounts owed, he considered the $25,000 credit that Frank Cass was entitled
to from the 1997 execution on the judgment, but stated that, to his knowledge, Ferae had never
received any payments or property from the Casses to satisfy the judgment or any of the judgment
liens that it obtained from Patco. The trial court impliedly adopted O’Connell’s calculation, as its
final judgment used the same figures in setting forth the amounts owed by the Casses as of
December 11, 2020.
Hibernia objected to Ferae’s Exhibit O-1, contending that O’Connell’s interest calculation
violated Rule 701 of the Texas Rules of Civil Procedure, as it amounted to “an expert opinion
without any disclosure of the qualification or basis for such expert opinion.” On appeal, Hibernia
re-urges the same claim, resulting in the trial court improperly relying on the exhibit to calculate
the amount of interest owed on the judgment. This argument, however, suffers from the same
problem as Hibernia’s other evidence objections—the trial court never expressly ruled on the
objection, and it is therefore waived. See Seim, 551 S.W.3d at 166.
Moreover, even if we were to consider this issue, we disagree with the proposition that the
trial court could not make its own calculation, and nothing in our record shows the calculation
used was wrong. The Texas Finance Code, as well as related case law, place the calculation of
interest on money judgments in the hands of the trial court. The Code explains the appropriate rate
25
of interest and how it compounds. TEX.FIN.CODE ANN. §§ 304.001-007. The Texas Supreme Court
has recognized that both trial courts and appellate courts have the authority to calculate the amount
of interest owed on a judgment in accordance with the statutory provisions found in the Finance
Code. See, e.g., Long v. Castle Texas Prod. Ltd. P’ship, 426 S.W.3d 73, 87 (Tex. 2014)
(recognizing trial court’s responsibility to calculate the proper amount of post judgment interest);
Am. Paper Stock Co. v. Howard, 528 S.W.2d 576, 577 (Tex. 1975) (per curiam) (supreme court
reformed lower court’s judgment to reflect the correct amount of interest owed on the trial court’s
judgment); see also Mid-Century Ins. Co. of Texas v. Barclay, 880 S.W.2d 807, 813 (Tex.App.--
Austin 1994, writ denied) (holding that a trial court must “calculate post judgment interest on the
total amount of damages as directed by statute”). Neither the Code nor any of the cases we have
reviewed have suggested that a court must have expert witness testimony in making its calculation
of post judgment interest.
And we find it significant that Hibernia has not pointed to any substantive error that it
believes the trial court made in calculating the amount of post judgment interest owed on the
underlying judgment. For these reasons, we find no basis for concluding that the trial court
incorrectly calculated the amount owed on the final judgment.
3. Hibernia failed to raise a question of fact on the issue of whether the underlying
judgment was satisfied by payments from third parties
We next consider whether Hibernia raised a fact question on whether the underlying
judgment had been satisfied by payments that Ferae’s predecessors-in-interest received from third
parties. In general, we agree with Hibernia that if an underlying judgment is satisfied, this will
extinguish any judgment lien that was based on that judgment. See Equitable Trust Co., 644
S.W.2d at 52 (recognizing that a judgment lien is extinguished when the underlying judgment is
satisfied). Even so, we do not believe that the evidence relating to the two payments received by
26
Ferae’s predecessors-in-interest raised a question of fact on the issue of whether Ferae’s judgment
lien was extinguished.
a. The $20,200,000 payment based on the Brock Assignment
We first consider Hibernia’s argument that the $20,200,000 payment that Patco received
from Crown Rock and Parsley in September 2016 should have been credited to the underlying
judgment. We agree with Ferae that the payment was not intended to serve as a credit on the
underlying judgment.
The $20,200,000 payment was received in exchange for (1) Patco’s agreement to transfer
its interests in 1,000 acres in Upton County, and (2) Patco’s partial assignment of its interests in
any judgment liens in the county that might affect Crown Rocks’ interests in that property. Aside
from the fact that it is impossible to discern how much of this payment was intended as
compensation for the partial assignment of the judgment lien—as opposed to the transfer of the
1,000 acres—any amounts Patco received for the assignment of the judgment lien could not be
considered a credit on the underlying judgment. Instead, the assignment of the lien was a sale of
Patco’s partial interest in the underlying judgment against the Casses, as permitted by the Texas
Property Code. See generally TEX.PROP.CODE ANN. § 12.014 (a) (establishing right of a party to
sell a judgment). And in turn, the sale of a judgment (or a partial interest in a judgment) is not
considered a credit on the judgment. Rather, it is intended to give the transferee the right to
maintain any action that the transferor may have brought against the judgment debtors to collect
on the judgment. See Williams v. Hedrick, 131 S.W.2d 187 (Tex.App.--Beaumont 1939, writ
dism’d judgm’t cor.) (a stranger to a judgment who pays to take an assignment of judgment, does
not extinguish the judgment, but obtains the right to execute on the judgment); Hadad v. Ellison,
283 S.W. 193, 198 (Tex.App.--Beaumont 1926, no writ) (recognizing principle that a judgment is
not extinguished where the judgment is paid off by a stranger to the judgment and the assignment
27
and transfer taken by him); BW Vill., Ltd. v. Tricon Enterprises, Inc., 879 S.W.2d 205, 207-09
(Tex.App.--Houston [14th Dist.] 1994, writ denied) (recognizing that where an assignee “paid the
purchase price for the assignment of the judgment interests” against landowner for unpaid taxes,
the amount it paid was not meant to pay off the debtors’ existing tax debt, and instead was meant
to give the assignee the right to enforce the assignor’s interests). In other words, rather than
satisfying the judgment, an assignment keeps the judgment alive and in full force by giving the
assignee the right to collect on it. See Casray Oil Corp. v. Royal Indem. Co., 165 S.W.2d 244, 248
(Tex.App.--Galveston 1942), aff’d, 169 S.W.2d 955 (1943) (recognizing the right of an assignee
of a judgment to sue to execute on the judgment against the judgment debtors); River Consulting,
Inc. v. Sullivan, 848 S.W.2d 165, 169 (Tex.App.--Houston [1st Dist.] 1992, writ denied),
disapproved of on other grounds by Formosa Plastics Corp. USA v. Presidio Engineers &
Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (“An assignee may maintain in its own name any
action that the assignor may have brought, and unless the assignor has retained some right or
interest therein . . .”).
Accordingly, the trial court did not err in disregarding the $20,200,000 payment that Patco
received from Crown Rock and Parsley as a credit on the underlying judgment in calculating the
amount still owed by the Casses.
b. The $300,000 payment based on the PCORE lien release
We next consider the $300,000 payment that the Stephens Entities received from PCORE
in April 2015. That payment was made in exchange for the partial release of a judgment lien that
encumbered a mineral lease Frank Cass owned in Reagan County. Based on the record before us,
this transaction was not a sale or assignment of the Stephens Entities’ interests in the underlying
judgment, but was a release of its interests in the lien itself. And, as set forth above, a judgment
may be satisfied in whole or in part by a “release that is signed by the party entitled to receive
28
payment of the judgment or by that person’s agent or attorney of record.” TEX.PROP.CODE ANN. §
52.005(2); see also Rapp, 123 S.W.3d at 434 (a release of judgment is itself a discharge and
surrender of all rights of the judgment creditor in the judgment); Lyda Swinerton Builders, Inc. v.
Cathay Bank, 409 S.W.3d 221, 231 (Tex.App.--Houston [14th Dist.] 2013, pet. denied) (by signing
a release of lien, creditor intended to release the full amount of the lien, but did not intend to release
the remaining underlying debt it was owed).
But we need not decide whether this payment should have been credited to the underlying
judgment, as nothing in the record supports a finding that the amount of that credit would have
satisfied the underlying judgment or otherwise extinguished Ferae’s judgment lien. As Ferae points
out, when the trial court entered its Final Judgment giving Ferae the right to foreclose on its lien,
the Casses owed a total of $50,695,534.63. A credit of $300,000 would have only marginally
reduced that amount and would not have satisfied the underlying judgment or otherwise
extinguished Ferae’s judgment lien. See generally Broadway Plan v. Ravenstein, 364 S.W.2d 741,
744 (Tex.App.--Fort Worth 1963, writ ref’d n.r.e.) (where a judgment exists against two judgment
debtors, the judgment is extinguished only when the entire amount of the judgment is paid, and
therefore, “the payment of a sum less than the amount due on the judgment does not release other
judgment debtors or extinguish the judgment”), citing 34 TEX.JUR.2d, p. 743, sec. 634; Kirby v.
Fitzgerald, 89 S.W.2d 408, 411 (Tex. [Comm’n Op.] 1936). We thus conclude that Hibernia’s
evidence of this payment did not raise a question of fact that would have precluded the trial court
from granting summary judgment on Ferae’s foreclosure suit.
4. Patricia Stephens’ declaration did not raise a question of fact
Finally, we consider Hibernia’s argument that Patricia Stephens’ declaration raised a
question of fact on the issue of whether the underlying judgment was either partially or fully
29
satisfied by prior payments made by third parties that should have been credited to the judgment.
We disagree with this argument as well.
Patco, as a third-party defendant, filed the declaration the day before the summary
judgment hearing in response to TRP’s motion to compel discovery. In the declaration, Stephens
asserted that she located 16 boxes of documents previously maintained by her now-deceased
landman, which could have potentially contained documents responsive to TRP’s motion to
compel, pertaining to payments that the Stephens Entities and Patco had received relating to the
Casses’ properties. At the hearing, TRP’s attorney stated that he wanted to examine the documents
to determine whether any reflected undisclosed payments to Patco on the judgment. However,
neither TRP nor Hibernia requested a continuance to allow them time to review those documents.
On appeal, Hibernia contends that the trial court erroneously “excluded discovery” of these
documents, and that more discovery was necessary to determine whether the underlying judgment
had been satisfied by third-party payments Hibernia contends that without resolution of this issue,
a question of fact remained on whether Ferae’s judgment lien had been extinguished, and that it
was therefore premature for the trial court to grant summary judgment on Ferae’s foreclosure suit.
Setting aside the question of whether the declaration, filed as a part of a discovery dispute can be
considered part of the summary judgment record, we conclude the declaration does not raise a
question of fact that precluded granting the summary judgment.
In her declaration, Stephens stated that there might be documents “potentially relevant” to
TRP’s discovery request in the boxes in her possession, but she did not specify what those
documents might be or how they might affect Ferae’s right to foreclose on the judgment lien.
Neither TRP nor Hibernia tried to establish that there were in fact responsive documents in those
boxes. Nor did they move for a continuance to give them time to review the documents to
determine whether any of them might impact Ferae’s right to foreclose on its lien. See Tenneco
30
Inc. v. Enter. Products Co., 925 S.W.2d 640, 647 (Tex. 1996) (“When a party contends that it has
not had an adequate opportunity for discovery before a summary judgment hearing, it must file
either an affidavit explaining the need for further discovery or a verified motion for continuance.”),
citing TEX.R.CIV.P. 166a(g), 251, 252; Gabaldon v. General Motors Corp., 876 S.W.2d 367, 369
(Tex.App.--El Paso 1993, no writ); see also Chico Auto Parts & Serv., Inc. v. Crockett, 512 S.W.3d
560, 579 (Tex.App.--El Paso 2017, pet. denied). As well, Hibernia did not request leave of court
to introduce the documents into evidence after the hearing, as permitted by Rule 166a(c)—
although the trial court did not issue its final judgment in the matter until April 15, 2021, several
months after the December 2020 hearing. See TEX.R.CIV.P. 166a(c) (trial court may base its
decision on affidavits and other evidence on file at the time of the hearing, “or filed thereafter and
before judgment with permission of the court”). Finally, Hibernia did not complain in its motion
for new trial about its inability to review those documents, or request a new trial on that basis. So
although Hibernia had the opportunity to explore this issue in more depth in the trial court,
Hibernia failed to do so and thereby failed to meet its burden of establishing that there were any
documents in the boxes that would have shown that the underlying judgment was satisfied or that
Ferae’s judgment lien had been extinguished. 6
Accordingly, for the reasons set forth above, we conclude that Hibernia did not meet its
burden of establishing that a question of fact remained on the issue of whether Ferae had a valid,
subsisting judgment lien on which it could foreclose.
Hibernia’s Issue Two is overruled.
6
Moreover, if Hibernia is complaining that it was not given an adequate opportunity to conduct discovery to review
the contents of the 16 boxes of documents, we conclude that Hibernia waived that issue by failing to raise it in the
trial court. See, e.g., M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 412 (Tex.App.--Corpus Christi 1999, no pet.)
(“Like most other rights, in order to complain on appeal of a trial court’s failure to allow further discovery . . . the
plaintiff must request it from the trial court.”), citing TEX.R.APP.P. 33.1.
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VI. THE FINAL JUDGMENT CORRECTLY REFLECT FERAE’S
PROPORTONATE INTERESTS IN THE BRANCH LEASE
In Issue Three, Hibernia contends that the trial court’s order of sale misstated, or is at least
ambiguous, in describing the nature of Ferae’s interests in the Branch Lease, as it ignored a “third
party’s working interest.” Hibernia phrases this as a sufficiency of the evidence challenge and
contends that there was a complete absence of any evidence to support a finding that Ferae had
any right to foreclose on the third party’s working interest. According to Hibernia, the judgment
therefore gave Ferae more relief than it requested and more relief than that to which it was entitled.
See generally Rouhana, 556 S.W.3d at 477 (discussing principle that a judgment must conform to
the pleadings and proof). We disagree, as we find that the order of sale correctly set out Hibernia’s
interest in the Branch Lease.
The trial court’s order of sale described the Branch Lease as “that Oil, Gas and Other
Mineral Lease from Ed Guy Branch and wife, Mona Glee Branch to William G. Cass, dated March
6, 1984, and recorded in Volume 200, Page 448, Oil and Gas Records, Reagan County, Texas.” It
then describes Hibernia’s interest to be sold as “[a]n 82% interest in the Branch Lease, subject to
its proportionate share of lease royalties, overriding royalties and other burdens totaling 25%
(thereby delivering a 61.5% net revenue interest to said 82% interest) for the East 80 acres of the
West half of the San Antonio Ditch Company Survey No. 1 for depths below the base of the Dean
Formation.” According to Hibernia, this description does not account for “a 1/16 mineral interest
which Hibernia received free and clear of [Ferae’s] Judgment Lien by way of a completely separate
oil and gas lease.” Hibernia explains that this 1/16th working interest originally came from Ed and
Maud Branch, who conveyed it to O.P. Becken in 1927, and that in 2019, Hibernia entered into an
oil and gas lease with O.P. Becken Land and others for this 1/16th interest (the Becken Lease).
Hibernia contends that the Casses never owned this 1/16th interest, and that it therefore should
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have been expressly excluded from the sale. According to Hibernia, the order of sale therefore
should have described the interest to be sold as a “76.8750% working interest (57.65625% net
revenue interest)” in the Branch Lease.
Ferae responds by pointing out that the term, “the Branch Lease,” as used in the order of
sale, is a defined term that refers only to the lease conveyed in 1984 by the Branch entities to
William Cass, as recorded in the Reagan County oil and gas records, a copy of which was in
Ferae’s summary judgment evidence. In turn, the record contains documents showing that William
Cass assigned a portion of his interests in the Branch Lease to Frank and Michael Cass in 1984,
with Frank and Michael each receiving a 40% interest, and a third-party receiving 2%, which was
later assigned to Michael Cass in 1987. In addition, the record contains a “Stipulation of Interest”
signed by all three Cass brothers, which was filed in the Reagan County records as Exhibit A to
the Branch Lease, referencing both the 1984 and 1987 assignments of the lease, and reflecting that
(1) Michael Cass had a 42% working interest, with a net revenue interest of 31.5%; (2) Frank Cass
had a 40% working interest, with a net revenue interest of 30%; and (3) William Cass had an 18%
working interest, with a net revenue interest of 19.75%. As Ferae points out, this directly
corresponds to the total 82% working interest owned by the judgment debtors, and the total 61.5%
net revenue interest they owned in the Branch Lease under the order of sale. As Ferae also points
out, the 1/16th working interest that Hibernia and others have in the Becken Lease is completely
separate from the Casses’ interests in the Branch Lease. Accordingly, we agree with Ferae that the
order of sale correctly stated the nature of the Casses’ interest in the Branch Lease, and did not
encroach on any of the interests Hibernia or other third parties may have in the Becken Lease.
We note, however, that the order of sale does not reflect that Michael and Frank have
different interests in the Branch Lease, (42% and 40% respectively), which will impact the amount
of credit they will each may receive on the underlying judgment upon the sale of Ferae’s interest
33
in the lease. And this will be of importance, as the order of sale states that the sheriff or constable
is to “apply the proceeds [of the sale] to the payment and satisfaction of the Reformed Final
Judgment.” Thus, in the interest of justice, we direct the trial court to modify the order of sale to
reflect the respective interests of the two judgment debtors on remand. See generally TEX.R.APP.P.
43.6 (a “court of appeals may make any other appropriate order that the law and the nature of the
case require”).
Hibernia’s Issue Three is overruled, subject to our directions to the trial court to modify its
Order of Sale on remand as explained above.
CONCLUSION
We affirm the trial court’s final judgment granting summary judgment on Ferae’s request
to foreclose on its judgment lien on the Branch Lease, and its order directing the sale of Hibernia’s
interest in that lease. But we remand the matter to the district court with directions to modify its
final judgment and order of sale: (1) to reflect that Ferae has settled its dispute with TRP; (2) to
omit the language from the order of sale directing the sheriff or constable to execute on other
property belonging to the judgment debtors in satisfaction of the underlying judgment;, and (3) to
delineate the judgment debtors’ respective interests in the Branch Lease, to ensure that they receive
the appropriate amount of credit on the underlying judgment to which they are entitled.
JEFF ALLEY, Justice
December 20, 2022
Before Rodriguez, C.J., Palafox, and Alley, JJ.
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